Complaints About Closings

If you, like so many others, have a gripe about your last mortgage closing, federal regulators want to hear about it.

The Consumer Financial Protection Bureau is seeking comments from consumers and industry professionals about problems, or what the agency calls “pain points,” in the closing process.

“We recently finalized our ‘Know Before You Owe’ rules that improve the information you get when you’re shopping for a mortgage and signing on the dotted line,” said Peter Carroll, the bureau’s assistant director for mortgage markets, in a statement provided by the agency. “As part of our effort to make sure these rules are effectively implemented, we’re taking a deeper look at the overall mortgage closing process.”

After it more fully identifies the problems, the agency will study how market innovations and technology could be used to make loan closings go more smoothly.

The comment period opened on Jan. 3, and ends Feb. 7. So far, more than 140 people have submitted comments online. Among the common peeves are excessive and redundant paperwork; consumer confusion about how to read the HUD-1 settlement statement; errors on documents sent to the closing table; and lenders who don’t have documents ready in time.

But the biggest complaint by far concerns how little time borrowers typically have to review the closing documents. Many industry professionals advised in the comments that borrowers need to be better educated about what the documents mean, and given more time to peruse them before sitting down at the closing table.

“It is not the specific form,” wrote Mark McElroy, the chief executive of RamQuest, a title production software company in Texas, “but the ingredients of the entirety of forms, the clock ticking and the seriousness of the commitment of buying a home that applies so much stress the consumer does not know what to do but just ‘initial and sign here.’ Let’s provide ample time during the closing process for consumers to be educated and review the necessary forms.”

Consumer confusion at closing is a recurrent theme in J. D. Power’s annual survey of consumer satisfaction with mortgage lenders, said Craig Martin, the director of the company’s mortgage practice. Consumers, and first-time buyers in particular, complain about being unsure how much money to bring to the closing, and having insufficient time to review the closing documents carefully, he said.

The other major irritation is inconvenience. “Where the closing occurs might be convenient for the title company or the lawyer, but it’s not necessarily convenient to you,” Mr. Martin said. “And timing can also be an issue.”

The most recent J. D. Power survey, released in November, found that customer satisfaction with closings was considerably higher among those who used electronic documents. The satisfaction level averaged 830 (on a 1,000-point scale) among the 8 percent of borrowers who used electronic documents, and 772 among the 84 percent who used paper documents.

First-time buyers were twice as likely to report incurring additional fees at closing than were repeat buyers and refinancing customers.

Quicken Loans, the online lender, ranked highest in customer satisfaction among primary mortgage lenders for the fourth year in a row. The company’s ranking has less to do with technological convenience than overall customer service, according to Mr. Martin. B B & T (Branch Banking & Trust) ranked second in satisfaction, and U.S. Bank ranked third.Mr. Martin says Quicken is “very good at communicating with customers,” which “removes the stress from the situation.”